Cask Ale as Premium Product

In 1984, the trade magazine Pub Leader conducted a survey of beer prices around in England and Wales and discovered that cask ale cost 2p more per pint than comparable keg beer.

The average price for keg was 70½p a pint, while cask cost 72½p. (Lager was more expensive again at an average of 81p a pint.)

In trendy London, the price difference was even more pronounced, with a pint of cask ale going at 85½p (About £2.35 in today’s money.) One pub in the West End of the city was charging a staggering £1.03. (Equivalent to £2.90 today.)

The Campaign for Real Ale weren’t happy with this finding and urged the Brewers’ Society to admit that its members ‘are gradually turning real ale into a premium product at a premium price’.

What can we conclude from this? That being fussy makes consumers vulnerable to exploitation?

At any rate, it was surely CAMRA’s efforts in the 1970s which ‘turned real ale into a premium product’: brewers and publicans were simply, and somewhat reluctantly, responding to the market CAMRA created.

We’re trying to digest a big pile of surveys and articles about ‘the price of a pint’ from the 1960s onward, and we’ll no doubt share a few more of these snapshots as we go.

UPDATE 29/09/2015

We’ve got to file this somewhere and this post seems the best place: from the London Drinker, May 1980 (PDF) more evidence of premium pricing for cask ale over keg bitter in the wake of the ‘real ale craze’:

UPDATE 30/09/2015

And here’s another nugget from the London Drinker that appeared in the September 1980 issue:

Another word that doesn’t especially irritate us. Words are always imperfect but ‘premium’ conveys some meaning: do you want the basic mince pie or the premium one? It’s an indicator of *relative* value.

it was surely CAMRA’s efforts in the 1970s which ‘turned real ale into a premium product’

No, it was CAMRA’s efforts which created a level of demand which those brewers thought they could exploit through premiumisation. As time went on, presumably CAMRA kept up the pressure on prices – or else demand grew further, to the point where prices could be driven down that way – and real ale ceased to be a ‘premium product’, just as it had never been before. The point of CAMRA in those days was always to keep beer ordinary and real – it was about rallying enthusiasts to improve the quality of the beer available for everyone, not about promoting a niche alternative for enthusiasts.

Isn’t it generally still more expensive than John Smith’s and Tetley keg bitter? Haven’t checked recently so can’t be sure.

I think you’re right that that’s what they wanted to achieve but it’s hard to run what amounts to a ten-year campaign trumpeting the superior quality of a product, and increasing demand for it, without giving the brewers the idea of bumping up the price.

Having the idea of bumping up the price is very different from making a higher price stick. Free market economics alone would predict the arrival of new market entrants, attracted by those premium prices, which in turn would lead to competition on price and prices being driven down. Couple that with the lack of cultural support for higher prices – given that the dominant voice in real ale culture was calling (sensibly) for lower prices – and it’s not surprising that prices came down.

The alternative outcome would be the development of an informal cartel among real ale brewers – or at least a tacit agreement not to compete on price – underpinned by targeted marketing of the ‘reassuringly expensive’ variety and the fostering of a ‘premium’-friendly beer-drinking culture. Which didn’t happen.

If this analysis is right, the question is, when’s price competition going to kick in on the craft keg scene? You can’t help feeling that the first brewer to crack and bring the price down to cask levels will clean up. It’ll be galling if it’s BD. I did see Punk advertised in a Spoons the other day, priced £1 higher than the cask – which made it about the same price as cask in most of the bars nearby.

I’m with Ron – my recollection is that, abv for abv, keg was always dearer than cask, and lager was dearer still – even “standard” lager. I can’t believe Pub Leader (whatever happened to them?) was comparing like with like.

Lager still is, of course. I saw a barman nearly get thumped in a Spoons once, when a rather large bloke had gone for a top-up for his table (a pint and a half and a bag of crisps, sort of thing) – “how much?”. My pint (with 50p off) had come in at almost exactly the price of his half of Heineken.

Even £3.30 for a pint of Heineken is still a lot less than you’d be paying anywhere else. Not my usual tipple, but I’d bet in Central Manchester it’s often over £4.

One of Spoons’ more bizarre pricing anomalies is charging £2.15 for Carlsberg (the same as JS Extra Smooth and guest ales) but £3.40 for Carling. Presumably they take the view that if you’re so committed to Carling that you ask for it by name you deserve to pay full whack.

Seen it before. Don’t know if I’ve ever seen so many midstream horse-changes in a single post. (“You’re paying for the skill and the ingredients” – why’s the cask equivalent so much cheaper? “Cask is cheaper because people won’t pay more” – so why do they pay so much for keg, out of sheer generosity and the goodness of their hearts?)

Apart from anything else, he basically says that cask ale as a category makes a loss for the pub with every pint (so the more they sell the more they lose, Blue Monday-style), and that cask ale which is any good makes at best an insultingly small profit for the brewer. Which basically can’t be the case, or why would anyone still be brewing & selling the stuff? From getting out of cask to charging £6 a pint for keg, the entire post reads like a BD apologia, frankly.

It also reminded me (too late for the previous comment) of this from Max of Pivni Filosof:

If you are a brewer thinking of posting a detail of your cost to explain your prices, don’t bother. The information might be interesting, but it lacks importance. What interests me as a consumer is to get value for my money. If you can’t make your beers cheaper, then make them better, if you can’t make them better, then fuck off, the market doesn’t need you.

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We’re Boak and Bailey

We're geeks in general, but especially about beer and pubs. We write under the names Jessica Boak and Ray Bailey. We live in Cornwall in the UK. We've been blogging about beer since 2007. Email: contact@boakandbailey.com

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